Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction based on their likelihood to recommend a company’s product or service to others. It is a popular tool for assessing customer experience and is widely used in various industries to understand customer sentiment.
How NPS Works:
NPS is typically measured through a single question:
- On a scale of 0-10, how likely is it that you would recommend [company name] to your friends, family, or colleagues?
Based on the response, customers are categorized into three groups:
- Promoters (9-10): These are customers who are highly satisfied and loyal. They are likely to recommend the company to others, which can lead to positive word-of-mouth and brand growth.
- Passives (7-8): These customers are satisfied but not enthusiastic enough to be promoters. They are unlikely to actively recommend the business but aren’t dissatisfied either.
- Detractors (0-6): These are customers who are unhappy with the product or service and are unlikely to recommend it. They might also share negative feedback that could hurt the brand’s reputation.
To determine your NPS, subtract the percentage of promoters from the percentage of detractors. For example, if 50% of respondents were classified as promoters and 10% were detractors, your NPS is 40. It’s that simple, but it has huge value if you know how to manage it.
By turning feedback into action, you’re able to turn detractors into promoters, and you can learn from promoters what makes your business different so you can double down in those areas.
Businesses use various surveys and software to measure the customer experience, but even though they get the feedback, they don’t understand it or know what to do with it. It often sits in an Excel sheet or a Net Promoter System software, uncoupled from or barely integrated into a system of record. Another data silo with access to a few users.